Tempted to buy some shares?

egor110

As i've filled up my isa for this year would it be a good idea to get a shares isa that tracks the ftse 100 and pay into it each month?
Also can anyone tell me why it would be a good idea to buy into these cheap bank and oil stocks which are now available, i know they could drop even more but i'm looking at just sitting on them for 10 years so hopefully we'll be back to how things were in say 2006 except i'll own a load of shares?

opinions4u

Cheap bank = risk of full nationalisation = lose up to 100% of saving.

FTSE tracker funded monthly (Legal & General via a Quidco cashback payment) would be worth looking at if it's money you want to forget about for a few years.

Make sure any tracker fund has low charges (nil up front / no more than 1% annual) - there's no active fund manager!

StevieJ

egor110 wrote: »

As i've filled up my isa for this year would it be a good idea to get a shares isa that tracks the ftse 100 and pay into it each month?
Also can anyone tell me why it would be a good idea to buy into these cheap bank and oil stocks which are now available, i know they could drop even more but i'm looking at just sitting on them for 10 years so hopefully we'll be back to how things were in say 2006 except i'll own a load of shares?

I am fan of the oil majors, eg Shell based on the share price yesterday was paying a dividend yield of nearly 8% (tax free to a basic rate taxpayer) as far as I am aware Shell has never cut its dividend (doesn't mean it won't). The long term oil price is likely to trend up (probably oversold at the moment). Add to this the falling interest rates, Ithink it is a good buy IMHO.

egor110

I was thinking of the smaller oil firms ie: roxi petroleum (rxp) think shares are going for under 6.5p today.
In my opinion 2008 has proved people will pay whatever petrol cost's rather than use public transport, so i belive these shares are worth the risk.
Also what are your thoughts on agricutural shares http://www.h-l.co.uk/funds/security_details/sedol/B2Q8L64 i've also read about shares in cattle and pork livestock.

JimmyTheWig

It depends on your attitude to risk in terms of this money.

I agree with you that the banks look good value at the moment. But I said that the other day and then they fell a further 6%.
Paying into a FTSE tracker (I'm lead to believe that a FTSE All Share index is safer than the FTSE 100, with a similar expected return) regularly and leaving it for 10 years is almost bound to give better returns than cash. Yes, there is a risk. But you are spreading that risk across a whole host of companies and sectors and over a long timescale.
Buying a single stock, or a limited range, is much more risky. You could lose all of your money. Or you could do really, really well. It's up to you, at the end of the day. If you need to see that money again then a tracker is a better bet. If you can afford to lose the money then why not buy something you think is cheap?

egor110

I intend to invest long term (10 years+) so quite like the idea of the high yield type account where you just bank or reinvest the dividend each year, instead of checking out the markets and trying to sell at max profit but like i said i'd be willing to risk a couple of hundred on the smaller oil companies or banks and see how it pans out.

sabretoothtigger

Dont bet anything you cant afford to lose or might need in the next 5 or 10 years but I reckon it makes whole lot more sense to put money in now then it did last year or the year before even if it seems so bleak.

If you take the view the market cant fall any further then you may get a nasty shock but if you can put money and still be ok with leaving it to recover then I think that shows more sense/realism

amcluesent

The dead-hand of the Treasury will bleed dry (12% rates!) the part-nationalised banks and all their smart people will leave. The FSA will gold-plate the regulations for all the banks and strangle them slowly with jobsworths interfering. Avoid banking IMHO.

swiss69

I would avoid investing in single company shares. Yes the gains can be very good but the losses can be horrendous. I have bought 4 shares with the follwoing results

1. Bought at £9.90 now worth 64p
2. Bought at £5 now worth £1.40
3. Bought at £2.50 now worth 68p
4. Bought £1.75 now worth 45p


It has to be money you can afford to lose to take these risks. Investing monthly for a year in a quality fund would be a better higher

HankMcSpank

This article was meant to be uplifting....

http://www.moneyweek.com/news-and-charts/economics/dont-panic-the-world-isnt-ending-68405.aspx

but look at this extract (referencing a 70s downturn)...

"The predecessor to the FTSE 100 index, the FT-30 share index, sank from a peak of 543 points in 1972 to a low of 146 points in 1975, a level not far off that when war broke out in 1939.

That's a 73% fall! If you apply that to the FTSE now (all time high of 6950 - 73%), you'd be looking at about a level of 1876 points....we're presently at 4063....just another 50+% to go!

Of course it may not follow the 1970s template...this downturn is widely predicted to be much worse!

jebervic

HankMcSpank wrote: »

This article was meant to be uplifting....

http://www.moneyweek.com/news-and-charts/economics/dont-panic-the-world-isnt-ending-68405.aspx

but look at this extract (referencing a 70s downturn)...

"The predecessor to the FTSE 100 index, the FT-30 share index, sank from a peak of 543 points in 1972 to a low of 146 points in 1975, a level not far off that when war broke out in 1939.

That's a 73% fall! If you apply that to the FTSE now (all time high of 6950 - 73%), you'd be looking at about a level of 1876 points....we're presently at 4063....just another 50+% to go!

Of course it may not follow the 1970s template...this downturn is widely predicted to be much worse!

Never ever going to reach that level !!!